Teachers’ retirement pension is only income for most Ky. retired teachers
Published 8:31 am Sunday, October 29, 2017
This is written in response to the announcement from Gov. Bevin, Speaker of the House Hoover and President of the Senate Stivers regarding the pension situation in the Commonwealth of Kentucky. While I appreciate the hard work the legislators have done to create this proposal, the published highlights of that proposal cause some concern.
The Teacher’s Retirement System of Kentucky is a separate entity from the other state pension plans and is in better shape financially than the other plans. Kentucky’s teachers have never and do NOT now participate in the Social Security system. Therefore, the teachers’ retirement pension is the only income for most of Kentucky’s retired teachers.
Kentucky law (KRS 61.692) is an inviolable contract that prohibits state employees’ retirement benefits from “being reduced, altered, amended, or repealed.” While not all of the current benefits teachers received are covered under this contract, their pension and cost of living adjustments (COLAs) are included. One of the highlights of this proposal is that COLAs of retired teachers be frozen for a period of five years. This will reduced all retired teachers’ income by 7.5% for that period. This COLA has already been paid for by the teachers themselves and they are entitled to it.
Also, this proposal suggests forcing all new hires into a 401k plan which will require higher employee contributions with no guaranteed retirement benefits. This will make it much more difficult to attract and keep quality teachers. It also undermines the current pension system by taking away future contributions and will cost the local school districts (which are already strapped financially) an additional 2% of every new teacher’s salary.
This proposal contains many more troublesome items too numerous to mention in this letter. While we await exact details of what the final bill brought before the legislature will contain, it is clear that what is currently proposed will be harmful to the retirement security of not only Kentucky’s retired teachers, but also those currently teaching.
It is very important that we keep addressing this issue until it is finally resolved. Please consider contacting your legislator at 800-372-7181 and let them know you support Kentucky’s children by securing an adequate retirement for Kentucky’s educators.
Thank you for your support.
Martha R. Francis
LC Retired Teachers Association